DEEPAK D TIWARI,MUMBAI vs. CIT 3, MUMBAI

The sole ground raised by the assessee in this appeal is that the learned CIT(A) failed to consider the request for reduction of penalty to a minimum level of 100% against 300% levied by the AO.

The assessee is a doctor by profession. He had declared total income of Rs. 4,33,880/- for the impugned assessment year. The AO completed the assessment under section 143(3) of the Act, determining the income at Rs. 8,25,390/-. The addition included, apart from the disallowances of expenses, an amount of Rs. 2,03,258/- on account of interest received from savings account, FD account and RD account under the head income from other sources and Rs. 1,78,200/- being deposits in the savings bank account as unexplained cash credit under section 68 of the Act. Then the AO imposed maximum penalty @ 300% of tax sought to be evaded and it comes to Rs. 3,43,311/-. To arrive at this amount of Rs. 1,14,437/- the AO subtracted Rs. 82,180/- (the tax on total income excluding concealed income ) from Rs. 1,96,617/- ( tax on total income including concealed income)

The learned Counsel of the assessee pleaded that the penalty charged by the AO @300% is too harsh and the same be reduced to @100%.

The learned DR supported the order passed by the learned CIT(A) and AO.

After considering the rival submissions and perusing the relevant material on record, we find that the addition of Rs. 2,03,258/- made by the AO to the total income of the assessee consists of the following :

In view of the facts and circumstances delineated hereinabove, we direct the AO to impose minimum penalty @ 100% of tax sought to be evaded which comes to Rs. 1,14,437/-.